Blackberry 10, Windows Phone 8, and all of the new phone and tablet operating systems out there face a serious problem in the fight to gain market share from Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS: Developers want to develop apps for an operating system with the largest possible audience and customer base, and users want to use the operating system with the most and highest quality apps. If they can find a way to succeed, they may in fact end up answering a question that puzzled people since ancient times.
At first look, the dilemma of attracting users and developers appears to be new and unique, brought about by new technology, but in reality, the question is nothing more than a modern day revival of the eternal question of conception, "What came first, the chicken or the egg?"
First, let's look at the original question: The conception of species, and the chicken or the egg has challenged philosophers and scientists alike for generations. The great philosopher Aristotle was so bewildered by the question of the egg that he remarked "This simple white shape is beyond the ken of these so-called geniuses!" It was even addressed in Harry Potter, when Luna Luvgood responded to a similar question (the Phoenix or the flame), "Well then, I think the answer is that a circle has no beginning."
Aristotle no doubt discussing the question
Can the smartphone wars possibly be the answer to a question that has challenged us since ancient times? It won't put the question to rest for good, but it may provide anecdotal evidence proving one theory or another. By association, it should give us an idea.
Blackberry (BBRY) itself is betting on developers. They have handed out thousands of free developer phones, and built up a strong system of support for developers. One developer, Nuno Donato of Portugal, wrote on his blog "[I] just wanted to take five minutes to write a very special thank you post to the most awesome Developer Relations team on earth. It's truly amazing the amount of time, energy and concern that the Dev Rel team has invested in this past one year or so." The company has built up 70,000 apps by launch, which is impressive for a new operating system, but significantly less than their competitors. Their biggest competitors have more than ten times that, with iOS having over 700,000 apps, and Android having nearly the same amount.
Think of users as the chicken, the ultimate goal, but also a necessary part in the process of attracting developers, and the apps and developers as eggs, the created items there to hatch new growth. Which comes first? Users or developers and apps. We may be talking about the conception of an operating system, but if one of these smaller operating systems (BB10, Windows Phone 8, Ubuntu phone) succeeds, it may give us insight into the start of our species. Watch these next few years, because the results of this battle may shock the world.
So what does this mean for Blackberry shareholders? Don't expect crazy revenue over these next couple of quarters. Reinventing a company means alienating your current customers in search of new ones, and past trends of adoptions for older operating systems point to a curve that doesn't see rapid growth until it hits a certain critical mass. The next year and a half for Blackberry is about hooking as many users as possible into their operating system, but if they succeed there could be a major payout down the line. It's a risky investment because as I said, this challenge has never really been overcome before in such a competitive market and there is no clear path, but if you're willing to take the risk you could potentially be looking at a major reward over the long term.
Am I overemphasizing the importance of this a bit? Maybe. There may not be a perfect correlation between BBRY and this eternal question, but there is a correlation. The clarity of technology and accurate sales numbers should provide the closest thing to a scientific answer to this question, giving exact figures on what worked, and why. Until a time when we can actually say for sure whether the chicken made the egg, or the egg was there, and became a chicken, this may be the best evidence we can get as to the origin of all species, and that answer may provide some interesting new evidence towards certain investment strategies. Can an obsolete and nearly extinct company reinvent itself just as Apple did back in the mid '90s? And even with such competition? What other philosophical questions could we solve with technology?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.